A decrease in the price level will
A)shift the aggregate demand curve to the left.
B)shift the aggregate demand curve to the right.
C)move the economy up along a stationary aggregate demand curve.
D)move the economy down along a stationary aggregate demand curve.
E)have no impact on the economy.

Question

Quizplus · Accepted Answer

A decrease in the price level does not shift the aggregate demand curve itself but results in a movement along the curve. Specifically, it causes a movement down along the curve because lower prices increase the quantity of goods and services demanded.

A Decrease in the Price Level Will